What can I say except to report the facts as they are. Valero Energy (NYSE: VLO), one of my top picks of 2007, is my worst of 2008 -- so far! The refiners have taken a big hit this year as the Department of Energy has reported that gasoline inventories are up at the same time that oil prices have only come down marginally.

This is putting the squeeze on oil refiners like Valero, which are not able to increase margins on slackening demand at the pump. Last year, Valero made me look great all year long, rising 36%, and this year I stuck with it: Chasing Value: Valero Energy (VLO) is just so refined.

If the economy continues to look gloomy and the inventory trend continues, with supplies remaining more than ample, then perhaps my best pick will turn into my worst.

In the meantime, we are only 10 days into the new year, and January has been dismal. The market was up and down yesterday, finally ending higher, as fickle as I have seen it in a while, and it is up notably again today. Valero closed yesterday at $61.67, about $8 off my start point. It is up today even after the inventory report has been broadcast, so I think fickle is the word of the day, or even the week.

To find potential opportunities and verify my track record read Chasing Value or Serious Money.

DISCLOSURE: I own shares of VLO.

Sheldon Liber is the CEO of a small private investment company and the design and research principal for an architecture & planning firm.

Chasing Value: Valero Energy -- From best to worst? originally appeared on BloggingStocks on Thu, 10 Jan 2008 15:50:00 EST. Please see our terms for use of feeds.

To quote one of my college professors (with thick Chicago accent) "Ya pays yer nickle 'n ya takes ya bes' shot." This year I wrote over 200 stories and reviewed even more stocks. Going over all of this material I came up with the ones listed here as my four best and four worst of the year.

• Dow Jones Industrial Average: 12,501.52 is Up to 13,359.61 (+6.86%)
• NASDAQ Composite Index: 2,425.57 is Up to 2,676.79 (+10.36%)
• Standard & Poor's 500 Index: 1,424.73 is Up to 1,476.37 (+3.62%)

Continue reading Chasing Value: My best and worst picks of 2007

Chasing Value: My best and worst picks of 2007 originally appeared on BloggingStocks on Mon, 31 Dec 2007 15:00:00 EST. Please see our terms for use of feeds.

This was a close call for me, but in the end I decided I would only include one power company on my stock list for 2008, and this was not it. I recommended Duke Energy Corporation (NYSE: DUK) last year and wrote about the company numerous times.

Duke pays a handsome dividend yield of 4.29%, and will likely see some growth next year as investors look for stability. This year it was relatively flat. That might be good enough if the market ends in turmoil next year, but I expect it to trade below the Dow Industrials even if it trades ahead of the Standard & Poor's 500 Index.

If you are just starting out and building a new portfolio for the long term, Duke Energy is definitely a good conservative beginning. It would be in my top 20 picks, but it just got crowded out of my list of eight. DUK had a closing price of $20.56 Wednesday.

To find potential opportunities and verify my track record, read Chasing Value or Serious Money.

DISCLOSURE: We own shares of DUK in several portfolios. We bought in between $18 - $19 a share for a long term hold.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

Chasing Value: Duke Energy (DUK) in top 20 but not top 8 originally appeared on BloggingStocks on Thu, 27 Dec 2007 17:30:00 EST. Please see our terms for use of feeds.

The headline story in Barron's (subscription required) this week "Sell Buffett" may have created a buying opportunity! I thought that the story by Andrew Barry was a very fair analysis. However, since I wrote Chasing Value: Berkshire Hathaway did what it's supposed to do -- go up! like Barron's, calling attention to Berkshire Hathaway (NYSE: BRK.A)'s stock rise and suggesting investors put it on their watch list waiting for a pullback -- Barron's might have triggered just such a slip.

In Barron's story, they make the case that fair value for BRK.A is probably around $130,000. It was $142,400 at the time of publication. The article suggests Berkshire is overvalued by at least 10%. Guess what, today the BRK.A shares are trading around $133,000, down about 9%.

When I wrote a week before the Barron's story came out, I suggested the same thing they did, but unlike Barron's, I felt that if it came down it would be worth buying, not because it was set to jet in the near future, but because a 10% to 15% pullback gives you the opportunity to add one of the most solid companies in the investing universe to your core holdings at a time when the market is very erratic, and oil, gold, interest rates, food, energy, housing, etc. is in turmoil.

Continue reading Serious Money: Barron's 'Sell Buffett' creates a buy!

Serious Money: Barron's 'Sell Buffett' creates a buy! originally appeared on BloggingStocks on Tue, 18 Dec 2007 14:35:00 EST. Please see our terms for use of feeds.

For the most part, this year has portrayed itself as a stock picker's market. If the stock you happened to pick was Google (NASDAQ: GOOG), which I included for fun because of its popularity, it beat all else as a portfolio of one.

The average of my seven picks fell as dramatically in November as it rose in October, reflecting the ebb and flow of the Chinese market. James Cramer's average based on his nine picks sank as well, but not as much. While Cramer managed to stay ahead of all the indices, and I beat the benchmark Standard & Poor's 500 and marginally beat the Dow Jones Industrial Average, I lost out to the NASDAQ and the average of the three.

Last month, after reporting spectacular gains, I remained realistic when posting "Of course, this could easily change given recent market volatility. A sharp downturn in the market could reverse our fortunes. A lot can happen in the remaining two months -- I take nothing for granted."

Yes, Google has done well, but Cramer's best, Apple (NASDAQ: AAPL) has done much better. It seems to be priced for perfection, as they say, but it also seems to be achieving it so far on the wings of the iPhone, iPod, and growing Mac sales. Warren Buffett voiced his opinion that the Chinese market has gotten bloated, and PetroChina ADR (NYSE: PTR), while still up significantly, dropped back off its all-time highs after becoming the second-largest capitalized company in the world.

Continue reading Chasing Value: After 11 months, AAPL +125%, GOOG +50%, PTR +35%

Chasing Value: After 11 months, AAPL +125%, GOOG +50%, PTR +35% originally appeared on BloggingStocks on Mon, 10 Dec 2007 16:55:00 EST. Please see our terms for use of feeds.

This year has been a stock picker's market extraordinaire! This month's review provides ample evidence of this, as you'll note that Google (NASDAQ: GOOG), which I included for fun because of its popularity, beat all else as a portfolio of one. The average of my seven picks came in second, beating James Cramer's average based on his nine picks. Both Cramer and I beat each of the three indices I am tracking, and therefore beat the average as well, with the largest and most stable, the Standard & Poor's 500 coming in last.

Of course, this could easily change given recent market volatility. A sharp downturn in the market could reverse our fortunes. A lot can happen in the remaining two months -- I take nothing for granted.

While Google shined brightly this year, Cramer and I have each made one pick that shined brighter. Cramer's best, Apple (NASDAQ: AAPL) has gone into orbit this year on the wings of the iPhone, iPod, and growing Mac sales. Benefiting from rising oil prices, shortages in China and the Chinese government allowing a 10% price hike, my PetroChina ADR (NYSE: PTR) has rocketed, becoming the second-largest capitalized company in the world. PTR has done this even in the shadow of Berkshire Hathaway (NYSE: BRK.A) selling its shares and Warren Buffett questioning the huge appreciation of the Chinese stock market and stocks overall.

Continue reading Chasing down 007 picks: AAPL +135%, PTR +85%, GOOG +53%, & VLO +36%

Chasing down 007 picks: AAPL +135%, PTR +85%, GOOG +53%, & VLO +36% originally appeared on BloggingStocks on Fri, 02 Nov 2007 14:10:00 EST. Please see our terms for use of feeds.

The Federal Reserve Board is meeting Tuesday and Wednesday and all eyes will be looking for a rate cut and some clue as to their future bias. When I say all eyes, I mean all eyes; Wall Street, large and small investors, mortgage lenders, big banks, mortgage holders, buyers of our Treasury notes, foreign bankers and foreign treasuries, currency traders - you name it, they're watching!

Crude Oil Rises to Record Above $93 as Mexico Idles Production and could reach $100 a barrel before too long if global events like war, weather, and a weak dollar continue to remain in the headlines. You have heard the term petro-dollars: this is a factor in rising prices. If oil is paid for in dollars and the dollar falls in value compared to other currencies, then it seems only natural that as the value of the dollar falls oil rises. This happens as the oil exporting nations try and maintain a globally stable price. A weaker dollar increases the price of oil for Americans but not so for Europeans. They can exchange their strong Euros for dollars and might even be buying oil at a discount.

This may make pump prices in Europe relative to ours more stable, but it has foreign corporations and Goverenment Treasuries up in arms because they don't want to see their balance of trade and global competitveness negatively affected. The IMF raised concerns last week as did I in Bush administration pushing dollar down or allowing it to fall? IMF chief sounds alarm followed up by my concern that our government does not seem to be concerned in: Is Bush giving the country away without knowing it? It may be advantageous to those at the top of the food chain, but what of the people who are not in the stock market and have to put a higher percentage of their (strained) income into energy costs for gas, and food costs for higher milk, sugar, and other staples?

Continue reading Fed meets: Do more rate cuts equal $100 oil? APC & AAUK up up and away

Fed meets: Do more rate cuts equal $100 oil? APC & AAUK up up and away originally appeared on BloggingStocks on Mon, 29 Oct 2007 19:23:00 EST. Please see our terms for use of feeds.

Hey there Google Inc. (NASDAQ: GOOG) fans, congratulations on another fantastic earnings report. But I wouldn't be too smug if I were you.

Amazingly, there is a company out there that did even better. That company is Intuitive Surgical (NASDAQ: ISRG).

While Google is getting most of the press, this rapidly growing company is not just "high-tech"... it may be the "highest-tech" stock in the market, or close to it. ISRG, which makes robotic surgical equipment, beat Google last year, it trounced it this year, and it is highly likely it will surpass it next year.

Looking at a chart for the past three years it may be shocking to some investors to imagine anything leaving Google in its dust...but Intuitive Surgical has, take a gander:

Continue reading Serious Money: GOOG has blowout quarter -- but ISRG beats it roundly

Serious Money: GOOG has blowout quarter -- but ISRG beats it roundly originally appeared on BloggingStocks on Mon, 22 Oct 2007 16:30:00 EST. Please see our terms for use of feeds.

Some of you may be sick of me writing for the third time in five days about PetroChina ADR (NYSE: PTR) -- unless you own it. But, it is on fire, so it is news. This morning as I type, PTR is up another $30 a share, passing $260. Many readers know why I invested in the company and may know that Warren Buffett did as well. His company Berkshire Hathaway (NYSE: BRK.A) ... has been selling of late, and has left a lot of money on the table.

I thought if there were any readers that would be willing to share when and why they bought PetroChina, their perspectives would be interesting. It would also be interesting if there is anyone that has been following this stock and feels they missed the boat, or on the other hand, thinks it is going to start falling for any reason. Is it time to sell or do some trimming? This post is meant to give readers a platform to discuss oil prices in general, and whether they believe energy should be excluded from the government's inflation figures.

From my perspective, I think energy should be included in the Consumer Price Index, perhaps as a rolling average, to account for volatility, but it should count. As far as PetroChina's sky-high stock price, I am skeptical when anything goes up this much without any earnings news or something about earnings.

Disclosure: I own shares of BRK.B and PTR.

To find potential opportunities and verify my track record, read Chasing Value or Serious Money.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

Never mind why I bought PetroChina (PTR) -- why did you?! originally appeared on BloggingStocks on Wed, 17 Oct 2007 13:10:00 EST. Please see our terms for use of feeds.

I think you all have gone mad if you are buying stocks today just because the market is moving up, or you are planning on federal rate cuts yet to be announced, or Hilary Kramer or James Cramer said so, or you are afraid the train is leaving the station without you, or your stock broker or palm reader has become bullish. There is only one reason to buy stocks and that is to make money and secure your future for the long run. To do that you need to have solid reasons that can be accounted for and demonstrated to have a high degree of probablity. I did not see that today.

A friend of mine asked me today whether they should sell their shares of Google Inc. (NASDAQ: GOOG) and take profits after it's recent runnup. I told them I had no idea whether to buy, sell or hold. There was no concrete data that has been released since it's last quarterly report (after which it dropped by $50 in one day) so to me it is all wild speculation. If you believe that the rate cuts are good for the overall market which includes Google then perhaps you can hang your hat on that -- I won't be.

I have been touting Huaneng Power ADS (NYSE: HNP) for a long time and those that paid heed to my comments made a ton of money with me, but even though I love this stock I am not promoting it today after it's 45% jump in the last six weeks Volatile Market picks: Huaneng Power (HNP) is my pick for the next 50 years. I like to buy on dips as I wrote when it was down 20% off its high not when it is screaming forward to new highs. I think patience is in order.

Continue reading Throw caution out the window GOOG, AAPL, HNP, ACH, VLO, ISRG -- NOT!

Throw caution out the window GOOG, AAPL, HNP, ACH, VLO, ISRG -- NOT! originally appeared on BloggingStocks on Mon, 01 Oct 2007 17:39:00 EST. Please see our terms for use of feeds.

This Chasing Value post marks my 400th story for BloggingStocks over the last 18 months. I originally agreed to do about five per month, so I have exceeded what I thought was practical, given my other responsibilities. Through this time I have learned a lot about writing, blogging, editing, the internet, AOL, and have continued to improve my investing acumen, which is a never-ending process. Many of our readers have contributed with some thought-provoking commentary and made this time a more interesting journey. I created the Chasing Value section after discussions with Senior Editor Amey Stone, and it seems to have gathered a modest following. This is the latest installment tracking my 2007 picks.

Through September, the market has benefited from a 0.5% interest rate cut by the Federal Reserve Board, recovering much of August's losses. This has also stimulated oil and gold prices to new highs and caused the dollar to shrink in value overseas. To some degree I think this resulted in foreign stocks rising significantly, most notably Huaneng Power International ADS which derives 100% of its revenue outside the United States. Last December, I made a strong case for HNP; prior to its recent rise I did so again for our Volatile Market picks: Huaneng Power (HNP) is my pick for the next 50 years.

This year continues to be a stock picker's market, as the volatile James Cramer of TheStreet.com and I have both topped the indices. Cramer made the best and worst picks for the year among those I've been tracking monthly. Apple Inc. (NASDAQ: AAPL) is the best performer among all the stocks and indices in this review, and has stabilized what might have otherwise been a mediocre showing. It has been a good year for energy and tech stocks. The past few months have been dismal for the financial sector, and anything lingering near its giant shadow.

The Dow Jones Industrial Average is once again approaching its high of 14,000 and looks like there might be room to exceed it. The housing market and subprime loans continue to worry investors, but unlike last month when an interest rate cut was not a certainty, the market seems to be betting now that another cut is not far off.

Continue reading Chasing down 007 picks: AAPL +89%, HNP +46%, PTR & VLO +30%, GOOG +22%

Chasing down 007 picks: AAPL +89%, HNP +46%, PTR & VLO +30%, GOOG +22% originally appeared on BloggingStocks on Mon, 01 Oct 2007 13:01:00 EST. Please see our terms for use of feeds.

In the case of an oil company, fire is not exactly something you look upon favorably. But when it's the stock, you have to get excited. One of my stock picks for 2007 was PetroChina Co Ltd ADR (NYSE: PTR) and for the past two weeks it has been on fire.

Before I go further I must disclose we own PTR in three portfolios, buying in at $44, $55 and most recently at $120 this year. Today as I write this post it is over $180 per share so for a multitude of reasons it is making me look good.

I have been questioned numerous times about this stock holding given that "my pal Warren" -- Berkshire Hathaway (NYSE: BRK.A) has been selling. According to the story he sold at an average price of $147 per share most recently. What few fail to mention is that he kept 90% of his shares. There are any number of reasons he took this action and those have not been shared.

In the meantime I have sold nothing. I did not buy it because Buffett bought it and I am not selling it just because he is reducing his shares. One pressure on Berkshire is that political ramifications of PetroChina doing business with the government of Somalia (and Darfur) has put questions into some shareholders' minds about whether it was immoral to hold PTR given the documented human rights violations in the region.

But how many oil producing nations today can be looked upon favorably? Almost none in the Middle East, given the standing of women, non-Muslims, political opposition, freedom of speech and many more severe atrocities. How about our friends the Russians or the Chinese? Would anyone nominate them for a congeniality award or glowing examples of democracy? No way! So the world is complex and sometimes you can do more by working from the inside with a whisper, then you can screaming from the outside.

Continue reading Serious Money: Oil on fire -- PetroChina (PTR)

Serious Money: Oil on fire -- PetroChina (PTR) originally appeared on BloggingStocks on Mon, 24 Sep 2007 16:30:00 EST. Please see our terms for use of feeds.

This is the third update on the stock price status of the first six Chasing Value companies. Closing prices are from July 5, 2007. I keep track of my recommendations and thought I would share the results as I do most everything else in my posts. Anyone considering my commentary should "do their homework" too, as James Cramer rants on his Mad Money TV show. These recommendations are all from the first quarter 2007.

February 16, 2007: Chasing value: Wells Fargo: Wells Fargo & Company (NYSE: WFC) closed at $35.32 down from $35.76: a loss of 1%.

February 23, 2007: Chasing value: Anadarko Petroleum - got it! Anadarko Petroleum Company (NYSE: APC) closed at $52.40 up from $40.84: A gain of 28.3%.

March 3, 2007: Chasing value: Aluminum Corporation of China ADS: Aluminim Corp. of China (ADS) (NYSE: ACH) closed at $46.16 up from $22.98: A gain of 101%

March 20, 2007: Chasing Value: Anglo American - Inflation hedge & more: Anglo American plc (NASDAQ: AAUK) closed at $30.98 up from $24.65: A gain of 25.68%

March 23, 2007 Chasing Value: Cemex and LaFarge look solid: CEMEX S.A. B de C.V. (ADR) (NYSE: CX) closed at $37.38 up from $34.92: A gain of 7%. LaFarge (ADS) (NYSE: LR) closed at $45.56 from $39.02: A gain of 16.76%.

Some day I will have to eat humble pie, but not today. As you can see, 5 of the 6 stocks are up and beat the market indices and most funds, individually and collectively, by a very large margin, and I have not included the dividends.

Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well.

Disclosure: I own APC, ACH and CX in several portfolios.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

Chasing Value update 3: SCOREBOARD BABY! originally appeared on BloggingStocks on Fri, 06 Jul 2007 14:30:00 EST. Please see our terms for use of feeds.

Yesterday evening I went to see the movie Transformers with my 11-year-old son. (I think he will be broadcasting to every kid he sees today that it is a must-see.) Before the movie we visited the Apple Inc. (NASDAQ: AAPL) store a few doors down from the movie house. It was crowded and the whole store had been transformed into an iPhone store. The wall banners, storefronts, and the first product table by the door were dedicated to the new phone and there was a security guard hovering around the display table.

We played with the phone for a while and it has some impressive features. I think it is clearly a marketing success, and is so different from all the other phone options that it is likely to blow past Apple's projections of sales in the ten million range through the first 12 months. I do not think it would be hard to imagine 20 to 25 million units sold in the first 12 months. Many of my colleagues have been huge Apple stock promoters, the most enthusiastic Georges Yared has taken the lead in this respect. If you followed his lead you made money.

From my own value perspective I could not justify buying Apple but that is not to say that by some measures there is not value. So I decided to take a look at the metrics and here is my read on the stock now.

• Price-to-earnings P/E (TTM) 34.71
• Price-to-sales P/S (LFY) 3.85.
• Price-to-book P/B (LFY) 6.55
• Price-to-cash-flow P/CF 32.20
• Return-on-equity ROE (TTM) 22.85
• Profit margin: 10.3%
• Dividend: none

Continue reading Apple has value, but iPhone misnamed

Apple has value, but iPhone misnamed originally appeared on BloggingStocks on Thu, 05 Jul 2007 14:35:00 EST. Please see our terms for use of feeds.

Dear Mr. Blake,

The Home Depot (NYSE: HD) is one of the seven stocks I recommended for 2007 (check out my original Dec. 28, 2006 post on Home Depoot). So far it is the underperformer in the group, but I have been sticking with it in hopes that there was light at the end of the tunnel. I own an investment company and last year agreed to share some of my experience with AOL readers.

In the past three weeks I have written several stories about The Home Depot that have been read by thousands of customers, shareholders, employees, investors and business people. The high volume of comments that we have received indicate that your enterprise has lost a tremendous amount of goodwill over the past few years and will have to work very hard to regain it. I am sure the downturn in the housing market is having an impact on the company, but no one seems to be cutting you any slack. To put it simply, The Home Depot has made a lot of people very frustrated and angry. I will not repeat what has been said, but hope you will take the time for a few quick reads. I learned quite a bit, maybe you can, too.

I pledged to my readers that I would forward to you the stories with their comments in the hopes that you or someone representing you would take the time to read them and respond. Perhaps some of this has been relayed to you already. Perhaps these comments just mirror what you have already heard directly from customers, employees and shareholders, but if that's true not much has been done that is visible or tangible to those concerned.

Continue reading Frank Blake, CEO, The Home Depot & the Board of Directors: Are you listening?

Frank Blake, CEO, The Home Depot & the Board of Directors: Are you listening? originally appeared on BloggingStocks on Tue, 03 Jul 2007 22:45:00 EST. Please see our terms for use of feeds.

Through the month of June it seems that it remains a stock pickers' market as Google Inc. (NASDAQ: GOOG), James Cramer of TheStreet.com and I all topped the indices. Google continued its strong move upward battling me for the lead, while Cramer lost much of his gains of last month competing to stay ahead of the indices. Cramer is sticking with his NYSE Euronext (NYSE: NYX) pick, and it continues to drag him down. Earnings reports still trickle in but nothing major has affected the market. Mergers and acquisitions are a bigger story and something seems to be happening every day. This is my sixth follow-up report. It is not a long time, but short of a major change in the global economic picture it looks like 2007 will be a good year. For reference, check out my original Dec. 28, 2006 post on this topic.

There seems to be growing support for large cap stocks which analysts have been talking about but now might be starting to show up for real. The Dow Jones Industrial Average has been the market leader among the indices and may indicate that investors are finaly giving large cap stocks their due. It also may indicate that the global economy is doing better as a whole than the national economy. There also may be some flight to safety. That said, June seemed more cautious then May except in foreign markets as indicated by the strong rise in my Chinese picks. Investors moved the S&P 500 index to new highs.

Continue reading Chasing down 007 picks: Google leads, Cramer sags, value up!

Chasing down 007 picks: Google leads, Cramer sags, value up! originally appeared on BloggingStocks on Mon, 02 Jul 2007 19:40:00 EST. Please see our terms for use of feeds.

Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.

Ian Wyatt, editor of The Growth Report, chose LJ International Inc. (NASDAQ: JADE) as his favorite stock for 2007. Its 173% gain as of 6/1/07 has made it the number one performer among all stocks in our Top Picks for 2007 report. Here is Ian's original recommendation for JADE and his current favorite stock for the rest of 2007.

Updating his recommendation, the advisor now says, "LJ International continues to capitalize on China's extraordinary growth and accompanying demand for luxury goods -- specifically high-end jewelry -- by expanding its network of ENZO branded jewelry stores.

"Since 2004, when LJI began opening retail jewelry stores in China, it has opened more than 45 stores, established a presence in all of China's major cities, including Hong Kong and Macau, and established itself as China's #1 foreign branded jewelry retailer (Hong Kong and U.S. based), ahead of Tiffany & Co.

"The company has plans to more than double its network to 100 stores by year-end 2007, ahead of the Beijing Olympics. These stores generate robust sales, and, more impressive, nearly half of the existing stores are already profitable. Continued growth of its retail operations will enhance LJI's profitability since ENZO gross margins are twice those of the wholesale business.

Continue reading Top 20 advisors: Ian Wyatt wins with JADE

Top 20 advisors: Ian Wyatt wins with JADE originally appeared on BloggingStocks on Wed, 27 Jun 2007 14:00:00 EST. Please see our terms for use of feeds.

Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.

Mark Skousen, editor of Forecasts & Strategies and host of the July 4th investor think tank FreedomFest, chose Aluminum Corp. of China (NYSE: ACH), which rose 45% as of 6/1/07. Here is his original recommendation for ACH and his new favorite stock for the rest of 2007.

Updating his earlier selection, the advisor asks, "What's the future of a stock that has doubled in the past year, and up over 40% this year? I am tempted to take my profits and go elsewhere.

"But demand for alumina and aluminum remains strong. Aluminum prices have been flat for the year, but have more than doubled in five years. The company, commonly known as Chalco, is the world's number two alumina maker, and it beat forecasts with a 44% rise in second half earnings.

"The giant producer intends to enhance its global competitiveness and focus on expanding capacity and further acquisitions this year, aiding the nation's hunt for raw materials to feed a rapidly growing economy (8-9% GDP annual growth). Chalco is also China's largest aluminum maker.

"It reported a net profit of 5.0 billion yuan (US$645.7 million) for the six months ended December, bringing yearly profit to 11.745 billion yuan last year versus 7.02 billion yuan in 2005. Overall, I think Chalco can increase in price, but just in case we are wrong, let's set a protective stop of $30 a share, and sell if it hits this level on the downside."

Top 20 advisors: Mark Skousen forges ahead with Aluminum Corp. of China originally appeared on BloggingStocks on Wed, 27 Jun 2007 11:01:00 EST. Please see our terms for use of feeds.

Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.

Vivian Lewis, editor of Global Investing, chose DryShips Inc. (NASDAQ: DRYS) as her top pick for 2007. The stock rose 126%, as of June 1, 2007. Here is her original recommendation on DRYS and her new favorite stock for the rest of 2007.

Meanwhile, the advisor now says, "DryShips is trading at a P/E of only 15, even now that the stock has gone up 300%. There is a lot of negativity about George Economou, who heads the company and now is the CFO.

"He headed a prior shipping company, which filed for bankruptcy after it could not pay back loans to British banks a decade ago. This was in the DryShips prospectus of course, and was also the subject of a report written by Kate Welling (former Barron's reporter) for a group shorting DRYS, including the Weeden brokerage firm.

"As a result, all this maybe makes DRYS cheaper than in would be otherwise. When I recommended DRYS in Global Investing in December 2005, I wanted it for its yield of 7.8%. That went up to 8.4% a year ago when the shorts were out in force, and the stock fell from $12.75 (our buy level) to $9.50.

"So the recovery is nice, but there is still an 'odor' around, which is why the resignation of the second CFO in a year causes some upset. I'm not giving up on this stock and indeed, perhaps would want to buy on weakness -- although as a holder, I am not sure I want to see weakness."

See all 20 stocks the advisors picked for the second half of 2007.

Top 20 advisors: Vivian Lewis sails on with DryShips originally appeared on BloggingStocks on Wed, 27 Jun 2007 10:35:00 EST. Please see our terms for use of feeds.

Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.

Ken Kam, editor of Marketscope, chose Valero Energy Corp. (NYSE: VLO) as his top pick for the year; it rose 48%, as of June 1, 2007. Here is his original recommendation for VLO as well as his new favorite stock idea for 2007.

Updating his outlook on Valero, Ken explains, "Refineries were once regarded by Wall Street as nothing more than future hazardous waste sites. For much of the last 30 years, it made sense to keep money-losing refineries operating in order to avoid the cleanup costs of shutting one down.

"Things have changed a lot in the past five years. Today, there is no excess refining capacity and profit margins have soared. The demand for refined products continues to grow along with the economy, but there are virtually no prospects for any new refineries being brought online anytime soon.

"The refineries that were once disregarded are now literally worth more than gold mines. Yet refining companies still trade at single-digit P/E ratios. Valero trades at a P/E less than 7. The S&P 500 by comparison has a P/E of about 16.

Continue reading Top 20 advisors: Ken Kam sees refined gains in Valero

Top 20 advisors: Ken Kam sees refined gains in Valero originally appeared on BloggingStocks on Tue, 26 Jun 2007 14:30:00 EST. Please see our terms for use of feeds.